Employee benefits are in the spotlight this week, and that’s because of three recent stories about US companies cutting back on non-wage compensations for workers.
A Texas tech consulting firm with a forgettable name—TTEC—suddenly became a lot more memorable when it suspended its discretionary 401(k) match program for 16,000 employees through at least the end of 2026. According to Business Insider, which viewed an internal TTEC memo, the company plans to invest in AI certifications, AI tools and training, and automation, among other things.
The auditing and consulting giant Deloitte is also reportedly slashing benefits for some workers starting next year. This includes reducing PTO, halving parental leave, and eliminating a $50,000 reimbursement for family planning services such as adoption, surrogacy, and IVF. San Francisco-based Zoom, meanwhile, has made a smaller-scale change and reduced its parental leave for employees from 22 weeks to 18 weeks for birthing parents.
So what’s the driving force behind this? And are there more cuts to come? The latter is impossible to answer, and the former is unfortunately more complicated than “corporate ghouls go AI.”
First off, “what Deloitte did is completely unconscionable,’” says Joan C. Williams, a professor at UC Law San Francisco, the author of several books on work culture and class dynamics, and an oft-cited scholar on these topics. The consulting firm is cutting the benefits of a specific class of internal workers—in admin, IT support, and finance—while leaving intact benefits for people in client-facing roles. An affected worker will see their parental leave cut from 16 weeks to just eight weeks.
“It treats people differently based on the type of job they’re in, and cutting any mother down to eight weeks of paid leave is just outlandish,” Williams says. “When labor is tight, employers are more generous. But once the power shifts, the benefits contract.”
AI certainly is a convenient excuse these days for any corporate decision that harms workers. But the impetus here is also the cost of the benefits themselves. Earlier this year subsidies from the Affordable Care Act lapsed, and people began dropping out of health care plans entirely. Insurers have cited this as one reason they’ve raised premiums.
Sarahjane Sacchetti, a former top executive at benefits administration companies Cleo and Collective Health, who is working on a new health care initiative, told me that the costs of employer-sponsored health plans have increased significantly over the past five years. A survey last year of over 1,700 US employers by the Mercer health care consulting group found that the health care cost per worker was expected to rise on average 6.5 percent in 2026, the highest since 2010. And this was after factoring in cost-reduction measures; otherwise, the cost of a plan would go up by nearly 9 percent.
“This just starts to eat into how you think about total compensation as an employer,” Sacchetti says. That doesn’t mean the corporation is the ‘good guy,’ she says, but the poor state of American health care policy and lack of safety net are responsible for a lot of the stress that plagues undercompensated or laid-off workers.
Williams points out that the US is one of the few countries that doesn’t offer a federal paid maternal leave—putting it in league with Papua New Guinea and Suriname. “This just shows how crazy it is to provide employee basics like pension and paid parental leave through private employers rather than how other industrialized countries do it,” Williams says. Her proposed solution? “The US needs to join the rest of the universe.”
The irony, of course, is that the US government professes to be obsessed with women having more babies. If women in the US are—as celebrity doctor Mehmet Oz put it this week in the Oval Office—“underbabied,” a comprehensive paid federal leave policy would be the obvious place to start. (Oz also said that “making babies” is “the most creative thing the universe knows.” Don’t tell the AI CEOs.)
As dire as these companies’ benefit reductions may sound, “it’s important not to normalize this by exaggerating it,” Williams tells me. Zoom, she notes, dialed back a policy from ‘very generous’ to ‘generous’; 18 weeks of paid maternity leave is still a standout in the US. Overstating the trend runs the risk of perpetuating it, given that companies have a tendency to use other firms’ controversial decisions as cover.
Besides, plenty of research shows that diminishing employees’ quality of life and lowering their total wages ultimately harms a company’s bottom line. Wayne Cascio’s comparison of Costco to Walmart’s Sam’s Club is one well-known example of this, and Williams’ own research arrives at the conclusion that “widely accepted ways of cutting labor costs have unintended consequences that can hurt, rather than help, an organization’s competitive position.”
The takeaway, as I see it? Workers should be mad about mass layoffs and that corporations are using their upper hand to squeeze the lifeblood out of employees and then strip away the benefits to treat it. But some of that anger should be reserved for a government that has failed to provide affordable health care, paid family leave, and other forms of social support. As workers rally and challenge the decisions of the C-suite, they should also be asking why their CEOs aren’t using their leverage to support humane federal policies or to push the government to provide better social services. This rot goes all the way to the top.
This is an edition of Steven Levy’s Backchannel newsletter. Read previous newsletters here.
